Insurer Had No Duty to Defend After Waffle House Shooting

The district court explained that it was “clear” that the allegations in the Horne parties’ lawsuit arose from an alleged assault and battery or physical altercation within the meaning of the assault and battery exclusion.

By Steven A. Meyerowitz|August 02, 2018 at 10:30 AM

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Steven Meyerowitz

This story is reprinted with permission from FC&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

A federal district court in Georgia has ruled that an insurer did not have to provide a defense to a lawsuit filed after a shooting at a Waffle House restaurant where its insurance policy contained an assault-and-battery exclusion—even though it also contained an endorsement covering “security and patrol agency services.”

The Case

After Adrian Mosley was shot to death at a Waffle House restaurant in Georgia, Shahnquala Horne, Shakierra Corbin, Mekoia Gaston, and Gladys Mosley (collectively, the “Horne parties”) sued Waffle House, Inc.; a Waffle House employee, Quintavius Martin; and The EJIII Development Company. The Horne parties sought damages for Mr. Mosley’s death and appeared to allege that Waffle House and EJIII were vicariously liable for Mr. Mosley’s death because Mr. Martin had been acting within the scope of his employment at the time of the shooting.

The Horne parties alleged that Waffle House was liable due to negligent training, employment, supervision, and retention; under a respondeat superior theory; and for failure to maintain safe premises. They alleged that EJIII had negligently failed to “provide and/or properly train security guards”; failed to “implement adequate security policies” for Waffle House by failing to “identify hazardous conditions” and “warn patrons”; negligently hired, trained, or supervised its employees; and either created, failed to warn of, or failed to discover the “dangerous conditions.”

Nautilus Insurance Company, which had issued a commercial general liability (“CGL”) insurance policy to EJIII, asked the U.S. District Court for the Northern District of Georgia to declare that it owed EJIII no duty to defend or indemnify in connection with the claims asserted in the Horne parties’ lawsuit by virtue of the assault-and-battery exclusion in its policy.

Nautilus moved for summary judgment.

For their part, the Waffle House and EJIII sought to rely on the policy’s endorsement providing professional liability coverage for EJIII’s security services, arguing that it overrode and negated the assault-and-battery exclusion (and that any ambiguity should be construed against Nautilus, the drafter of the policy).

The Nautilus Policy

The Nautilus policy provided that it did:

“not apply to ‘bodily injury’ … arising out of any: (1) Actual or alleged assault or battery; (2) Physical altercation; or (3) Any act or omission in connection with the prevention or suppression of such acts, including the alleged failure to provide adequate security.”

A “COVERAGE EXTENSION—SECURITY AND PATROL AGENCY PROFESSIONAL LIABILITY” provision stated that Nautilus:

“will also pay those sums that the insured becomes legally obligated to pay as damages because of the rendering of or failure to render “professional services” in providing “security and patrol agency services.”

The District Court’s Decision

The district court granted summary judgment in favor of Nautilus, finding that it had no duty to defend.

In its decision, the district court explained that it was “clear” that the allegations in the Horne parties’ lawsuit arose from an alleged assault and battery or physical altercation within the meaning of the assault and battery exclusion.

The district court then ruled that the assault-and-battery exclusion applied to claims stemming from an alleged assault and battery even if those claims otherwise would be covered by the professional liability extension.

It reasoned that the assault-and-battery exclusion specifically stated that it was added to “2. Exclusions of Section 1”—Coverages A, B, and C (which began, “This insurance does not apply to. …”), and the professional liability extension stated that it was added to “1.a, the Insuring Agreement,” of “Section I, Coverage A.” In the district court’s opinion, although the professional liability extension added coverage to Coverage A, the assault-and-battery exclusion, added to the subsequent “Exclusions” paragraph, had only one meaning: claims stemming from an assault or battery were not included in Coverage A.

According to the district court, this was the case regardless of whether those claims otherwise would have been covered under the portion of Coverage A in the body of the policy or the portion added through an extension.

The district court concluded that the underlying claims stemmed from an alleged assault and that the assault-and-battery exclusion applied to the entirety of the claims in the Horne parties’ lawsuit. Therefore, Nautilus had no duty to defend in their action.

Steven A. Meyerowitz is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications. As FC&S legal director, Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments.

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